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"What On-Line Real Estate Consumers Want"


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Nick Karris Photo
10/6/00 Interview with Nick Karris

Gomez Advisors
55 Old Bedford Rd
Lincoln, MA 01773
Biography

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Introduction to Gomez Advisors

  1. Gomez is an e-commerce research company that tracks vertical markets, including online real estate space; the company is a clearinghouse of objective information for real estate professionals and consumers.
  2. The Gomez online quarterly scorecard ranks the 20 top providers in various specialties, citing the benefits and shortfalls of each.
The Rating Process

  1. Gomez conducts consumer research to learn what homebuyers want when they come to the Internet; that information is matched with detailed, competitive analysis of hundreds of real estate web sites.
  2. Gomez distills the research into about 200 criteria, stated as measurable questions, such as, "How many listings does the web offering provide?
  3. For greater depth of information, random samples of listings are examined to measure their quality; consumers want current addresses and photos, an agent email contact, sales comparable data, etc.; these points are built into the scorecard and used to calculate a ranking.
What Online Real Estate Consumers Want

  1. Consumers want complete information disclosure‹e.g., in mortgages: qualifying rate, closing costs and how quickly closing can be guaranteed; a high-ranking mortgage site, Mortgagebot.com, allows price-shopping.
  2. Guaranteed performance (in writing, with money back) and a detailed terms-of-use policy (commission structure, rebates) are also attractive to consumers‹zipRealty.com is strong in these areas.
  3. Consumers like to feel in control and well informed throughout the real estate transaction; they are going online to educate themselves and to remain connected to the process.
  4. Free information available online includes property listings and sales comparable data; the best sites for comps are HomeGain and Domainia.
A Promising Business Model for Real Estate

  1. Online education of consumers allows the Realtor to deliver high value added services instead of performing the traditional, functionary role; the new model also empowers the consumer.
  2. Both zipRealty and eRealty allow consumers to dial into the MLS; agents focus on helping clients close the transaction; these companies are on the verge of providing closing documents via the Internet.
  3. Salaried field agents take a consultative approach with clients, whereas commissioned agents have to press to close a deal to get paid; payment to salaried agents is also impacted by clients' satisfaction.
  4. Initial transaction volumes of these new-model companies are still low but are expected to rise quickly based on consumer attitude surveys.
  5. The e-model and the traditional model for real estate businesses will converge over the next 3 to 5 years, combining the easy access and convenience of the Internet with high-touch customer service.
  6. The real estate market is so large that initially there is room both for companies that began traditionally and those that began under the e-model; consumers will choose on the basis of preferred level of service.
Barriers for Consumers Using Internet Tools

  1. In the mortgage space, privacy of personal financial information is a major concern for consumers, but only 75% of the leading firms on the home buying scorecard offer detailed privacy policies.
  2. A strong player on the privacy issue is E-Loan, which brings in independent auditors who review its adherence to its guidelines.
Consumer Advantages of the Online Process

  1. Access to listings, virtual tours and neighborhood content online allow the home buyer to efficiently screen for a few homes to visit with an agent.
  2. Mortgage-seekers can get pre-approved and get a risk-adjusted rate quote online in seconds; they can lock in their rate for 30 days to eliminate interest rate exposure during their home search.
Online Areas the Industry Can Improve

  1. Privacy and information disclosure are key‹agent commission rates should be revealed up front.
  2. The aim should be to provide a high-tech/high-touch integrated experience; many consumers still want a live, local, licensed Realtor with whom to interact, but that Realtor needs integrated back-end systems for support.
Gomez.com as a Resource

  1. Click on any of the ranked web sites to view an analysis of that site's strengths and weaknesses plus its score in key practical areas; apply what you learn about site content and design to improve your own web presence.
  2. Gomez can also be engaged to give you direct professional assistance.
Area of Golden Opportunity

  1. Consumers want a faster, easier, cheaper process; transaction automation technology meets that need by reducing costs and improving speed.
  2. A handful of technology providers are racing to grab market share through alliances with title companies, mortgage providers, brokers and regional MLS providers.
  3. Leaders in the race include iProperty, Realty Plus, Expeditrix and HomeAdvisor; each wants their technology to become the standard‹the next 6 months may determine who prevails.
  4. In the next 2-3 years, transaction automation will become widespread in the industry; Realtors need to understand how the information is being aggregated and stored, and who owns it.
Other Real Estate Favorites

  1. HomeAdvisor scores #1 in home buying and home ownership.
  2. Owners.com and Homebytes are good for the do-it-yourself home seller.
  3. Other sites doing new things include HomeGain and LendingTree. Advice to Practitioners You must have a presence on the Internet to effectively attract Internet consumers.
Contact Information for Nick Karris:

(v) 781-257-2060
(f) 781-257-2010
(e) nkarris@gomez.com
(w)www.gomez.com


Real Estate Sites & Tools in this Briefing:

www.gomez.com

Mortgage sites:
www.mortgagebot.com
www.countrywide.com
www.eloan.com

E-business models:
www.ziprealty.com
www.erealty.com

Comp sources:
www.homegain.com
www.domainia.com

Automation leaders:
www.iproperty.com
www.realtyplus.com
www.expeditrix.com
homeadvisor.msn.com

For do-it-yourselfers:
www.owners.com
www.homebytes.com

Innovative sites:
www.homegain.com
www.lendingtree.com